But the darling of Wall Street and Silicon Valley faces intensifying and potentially harsh scrutiny with the double-whammy revelations this week that federal prosecutors in San Francisco are investigating its stock-options practices and that its own internal probe uncovered potential misconduct on the part of key executives.

"My guess is that the investigation will intensify, especially because this is such a high-profile company," said UC Berkeley law Professor Jesse Fried, with investigators drawn to such cases like "bears attracted to honey."

Federal authorities are taking a hard look at companies that may have fudged the date on which options were granted to executives and employees in an attempt to boost their value. The practice, called backdating, is illegal if companies do not properly account for it and disclose it. Options give employees the right to buy stock in the future at its price at the time of the grant. If the stock price rises, the employee benefits.

In a statement designed to calm market jitters over the future of Steve Jobs, the chief executive widely considered the intellectual muscle and creative drive behind the company's brand, Apple said the internal probe concluded that Jobs knew some options grants had been manipulated but cleared him and current management of wrongdoing. The internal probe also concluded that Jobs did not personally receive any options for which he knew the issue date had been manipulated.

Apple's findings suggest that Jobs did not know that the method Apple used in dating those options was improper and potentially illegal, making it difficult for prosecutors to show criminal intent and likely sparing him from prosecution.

But other executives at Apple did, an embarrassing disclosure for the Cupertino company and one that is sure to encourage those lawyers who have filed derivative lawsuits against the company on behalf of shareholders.

Now the questions surrounding how the backdating occurred and what role, if any, current executives and board members played are in the hands of government investigators.

Kevin Ryan, the U.S. attorney for the Northern District of California, created a task force in July, calling the investigation of stock options manipulation a top priority for his office. His office did not return phone calls Thursday.

"The backdating investigation is a mile wide and an inch deep at this point. It's hard to know what it means that they are looking at anyone," said San Francisco white-collar criminal defense lawyer Nancy Clarence.

"What pushes a company into the realm of being a target is hard to read," Clarence said. "These are incredibly labor intensive investigations with millions upon millions of documents that have to be examined."

Apple said irregular options grants accounted for 6 percent of the company's grants between 1997 and 2002, a large enough percentage to suggest that "some people who benefited from these grants knew there was a problem." Fried said. Apple expects to restate its financial results to reflect the additional compensation for that period.

Apple would not name the former executives implicated in the backdating of options. But the company said Fred Anderson, the former chief financial officer during the period in question, resigned from the board.

Nancy Heinen, Apple's former general counsel, left the company without explanation in May. She retained prominent criminal defense lawyer Cristina Arguedas, who said Heinen has not been informed that she is a target of any federal investigation. In some companies, the in-house legal staff plays a central role in working with management and the board on options grants; at others, human resources staff does.

"The lucky companies are the ones where the backdating was done by people who are no longer there so there is nobody left to punish," Fried said. "The unlucky companies are those where systematic backdating ... was done by people currently there."